Bai Muajjal
(Deferred Payment Contract)
A contract
involving the sale of goods on a deferred payment basis. The bank or provider
of capital buys the goods (assets) on behalf of the business owner. The bank
then sells the goods to the client at an agreed price, which will include a
mark-up since the bank needs to make a profit. The business owner can pay the
total balance at an agreed future date or pay by installments over a pre-agreed
period. This is similar to a Murabaha contract since it is also a credit sale.
Bai al Dayn
Debt financing:
The provision
of financial resources required for production, commerce and services by way of
sale/purchase of trade documents and papers. Bai al-Dayn is a short-term
facility with a maturity of not more than a year. Only documents evidencing
debts arising from bona fide commercial transactions can be traded.
Bai al Salam
This term
refers to advance payment for goods which are to be delivered later. Normally,
no sale can be effected unless the goods are in existence at the time of the
bargain. But this type of sale forms an exception to the general rule provided
the goods are defined and the date of delivery is fixed. One of the conditions
of this type of contract is advance payment; the parties cannot reserve their
option of rescinding it but the option of revoking it on account of a defect in
the subject matter is allowed. It is usually applied in the agricultural sector
where the bank advances money for various inputs to receive a share in the
crop, which the bank sells in the market.
Bai Bithaman
Ajil
This contract
refers to the sale of goods on a deferred payment basis. Equipment or goods
requested by the client are bought by the bank which subsequently sells the
goods to the client an agreed price which includes the bank's mark-up (profit).
The client may be allowed to settle payment by instalments within a pre-agreed
period, or in a lump sum. Similar to a Murabaha contract, but with payment on a
deferred basis.
Contact us Here:
PRAGMATIC WEALTH MANAGEMENT PVT. LTD.
Head
Office:
102,
1st Floor, Topaz Society,
Dr.
Nair Road, Agripada, Mumbai Central (E), Mumbai 400011
Tel: +91-22-23001290
/ 23007290/ 9594932488 / 8108178683
E-mail: contact@pragmaticwealth.net
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